Ask an Expert
Does a Cost of Good Sold tax form need to be completed?
Expert: John R Mott
Carol asked:
My business is home daycare, do I complete a Cost of Goods Sold tax form? If so, what do I use and how do I calculate it?
John R Mott answered:
Because you are operating a business, you are required to report your business income and expenses on form T2125: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/menu-eng.html.
Since you are providing a service and not selling goods, one would not expect to see an amount for Cost of Goods Sold. You would simply enter Nil at this line, and at any other line that is not applicable. This is a generic form and not necessarily wholly applicable to every type of business.
About the author
John Mott is a chartered accountant and tax specialist with a private practice in mid-town Toronto. He provides tax, accounting and advisory services to individuals and small businesses. He may be visited online at: johnmott.com.